Status

Summary

This enactment amends the Bank Act to prohibit banks and authorized foreign banks, subsidiaries of banks and authorized foreign banks, and employees or representatives thereof from receiving any compensation from a person or entity in return for recommending that a customer of the bank or authorized foreign bank or subsidiary purchase an investment product sold by that person or entity.

Mr. Speaker, the purpose of this bill is to avoid a flagrant conflict of interest that costs Canadians a lot of money every year. This bill would prohibit banks, subsidiaries and their representatives from receiving any compensation from a person or entity in return for recommending that a customer of the bank or its subsidiaries purchase an investment product sold by that person or entity.

For investment products, such as stocks, bonds, mutual funds, index funds, hedge funds, and derivatives such as options or futures, there are harsh penalties for individuals, and there are even harsher ones for a legal entity, in other words the bank itself.